Per Deim . Can I get some advice?

[davemaes]

The company I drive for just offerd me per diem pay witch I believe he said was $45 per day and non taxable. Can I get some advice?

[Malaki86]

If you have a choice, it's simple - don't take the per diem.

Yes, you'll have more bring-home money. However, it will bite you in the ass later on. The Per Diem is non-taxable income, meaning that if you're injured and have to go on Workers Comp, that part of your income doesn't count. The same goes for Unemployment and later on in life, your Social Security.

[Uturn2001]

Yeah, what he said.

[movinit]

The only reason an employer offers per diem is it saves them money for they don't have to pay out as much in payroll taxes. Our company is always trying to cram it down our throats about what a tax advantage it is to us and they even went so far last year as to send out letters to all drivers who were not on it which said they had determined it would be in the drivers best interest to be on per diem based on that drivers payroll history.Yeah right, a trucking company that actually gives a darn about their drivers personal taxes. They then went on to say that if you did not respond by January 1st of this year they were going to automatically put you on it. A lot of drivers were pissed for they don't go home often and they didn't get this notification until the per diem started happening. Needless to say payroll was swamped with calls.

[countryhorseman]

Like has been agreed by the others - do not take the company per diem plan, in must cases it screws you up when you file your taxes!

The rate for filing in 2007 was $52.00/day and you claimed 75% on your taxes! When the 2008 filing comes around it will be $52.00/day, and claim is 80%.

I posted some links in another related string a little earlier to some IRS documents!

Budget yourself when on the road, and you will come out better at the end of the year on your taxes! A friend took the company per diem plan, and paid substantially more on his year end taxes then I did!

Good Luck!

[dle]

Per Diem
Saves the company money
Provides some additional cash to you
Makes your W-2 look funny
Hard to explain to others how you get from number of miles to net pay

Should you take it:
ask the question, how much a week additional on your take home would make a real difference in your life. If you are thinking it's going to add hundreds of dollars to each check - think again.

[Drew10]

Do not fall for the sales pitch of Per Diem putting more money in your pocket, it potentially will (less than $100 per week). The company wil tell you they do not benefit from this, although they do. I saw a detail of how they do it. They actually will cut your cpm (gross pay) by the equal of the per diem that they will add back onto your gross pay as per diem. For instance, If your paid .29cpm (gross) they will subtract .10cpm from that leaving a gross pay of .19cpm. Then they wil add your per diem on .10cpm (untaxed) bringing your pay back to .29cpm. Its the untaxed portion that will "increase" pay. But can cause nightmares when time to file your income tax. Some companies will even charge up to .01cpm from your pay as a "processing fee".
Its best to keep your full cpm pay (gross) and at the end of the year claim the deduction of $52 per day x .75 x the number of days away from home.
My opinion, this is one of the biggest "scams" a company will offer you.

[Fredog]

ask them if you can take the per diem and stay at the same pay rate, WHEN they say no, ask them why not, they wont have a good answer, they will have an answer but not a good one

[countryhorseman]

It screws up social security, workmans comp and un-employment (although that is a joke to start with) - the company also has to pay less of a share on the social security side of things! The don't benefit, yup, that is a joke!

Do not fall for the sales pitch of Per Diem putting more money in your pocket, it potentially will (less than $100 per week). The company wil tell you they do not benefit from this, although they do. I saw a detail of how they do it. They actually will cut your cpm (gross pay) by the equal of the per diem that they will add back onto your gross pay as per diem. For instance, If your paid .29cpm (gross) they will subtract .10cpm from that leaving a gross pay of .19cpm. Then they wil add your per diem on .10cpm (untaxed) bringing your pay back to .29cpm. Its the untaxed portion that will "increase" pay. But can cause nightmares when time to file your income tax. Some companies will even charge up to .01cpm from your pay as a "processing fee".
Its best to keep your full cpm pay (gross) and at the end of the year claim the deduction of $52 per day x .75 x the number of days away from home.
My opinion, this is one of the biggest "scams" a company will offer you.

[Malaki86]

I'd rather have any disability/comp calculated at $45k per year compared to $25k after the Per Diem.

[Rev.Vassago]

Per Diem causes gingivitis and ingrown toenails.

[Fredog]

Per Diem causes gingivitis and ingrown toenails.

and genital warts

[the_quiet_guy]

tell them you will consider it while you are waiting to hear back from the other companies you applied at, and you should be looking at other companies, last year it was $52 a day, if you stay with them, make sure they wear condoms..... :shock:

[davemaes]

ask them if you can take the per diem and stay at the same pay rate, WHEN they say no, ask them why not, they wont have a good answer, they will have an answer but not a good one

Now that you mension it, I remember reading a post from a driver that worked for Knight, and he said something to the effect that he made less money for the miles because he took the per diem. I work on a % basess but I'll ask out of curiosity if my % pay drops if I wrer to elect to go that route. I think I better stay away from the per diem. Thanks All!!!

[mdgardner963]

I would ask someone who is qualified to answer that like a cpa..
There are 2 general thoughts.

1 if they pay you .40 a mile and take .10 per mile for per diem then your income as far as loans taxes and the goverment is concerned is .30 per mile.

now for tax reasons some people with other deductions will take the per diem and it does not hurt them at all. While others who have few or no deductions will take the gross pay.

here is a good lipmens test. Is your per diem pay the same as gross like .40 a mile .30 cents a mile and .10 cents a mile per diem..

or is it .30 a mile + .8 gross? it is however simple math at the end of the day..

If your per diem pay is = to the gross pay then it might be for you if you have enuff deductions.. If how ever it is not = to your pay then NO it is not worth it.

312 days a year if otr out for 3 weeks average 500 miles a day =156k a year Xs .40 = 62,400 a year tax = 62400.00

per diem 52.00 Xs 312 days =16224.00
medical insurance per year 5564.00
replacement items gloves cloths ect. 1254.00
totdal deductions $23042.00 net pay before taxes 39358.00
12k for me and the wife net tax base 27,358.00 taxes 4924.44 net net

net pay 22433.56+16224.00 =38657.56

per diem based 15,600.00 per diem
regular pay 46800.00 - a + b = 62400.00
ok taxe base is 46800.
medical 5564.00
ect 1254.00
dependents 12000.00 deductions 18818.00 net pay 27982.00 taxed 5036.76 net net net pay is 22945.24

22945.24 + 15600.00 =38545.24 net pay

net gross pay 38657.00 =s +111.76 Gross pay vs perdiem pay.
net per diem 38545.24 =s -111.76 make more on gross..

it is really up to you and i would get some cpa advice.

knowlage is a great thing.

[Drew10]

per diem 52.00 Xs 312 days =16224.00

Careful with the math....The per diem rate is $52.00, however you can only claim 75%.
$52 x .75= $39 x 312 = $12168

[Fredog]

per diem 52.00 Xs 312 days =16224.00

Careful with the math....The per diem rate is $52.00, however you can only claim 75%.
$52 x .75= $39 x 312 = $12168

I cant verify this, but a friend was working for All American out of Georgia. he said he was getting 34 cents a mile and a per diem of 50.00 they told him they were stopping the per diem and giving a 9 cents a mile instead. he said when he got his first check after that, he made 25 cents a mile plus a 9 cent a mile bonus, now THAT"S how to keep drivers!! He quit as soon as they told him his check was right..

[mdgardner963]

per diem 52.00 Xs 312 days =16224.00

Careful with the math....The per diem rate is $52.00, however you can only claim 75%.
$52 x .75= $39 x 312 = $12168

I took 312 days not 365 days based on what my cpa does and i do write a log so the math is correct.. IF you eat out and can prove it..

it all depends how much home time you have and the goverment does it based on what they think the math is.. I have been audited and with my logs i always win.. Make sure you do a little book dates time places reciepts ect.. As long as you do it with logs and a book of were when who and times it works.. and the 75% rule is for time at home. i am out 312 days a year i don't average i do actual time out..

You have a choice of actual expenses or per diem i always take whatever is the most..